Doing Business in Emerging Markets Once the darling of emerging market investors, who fed on oil-led growth and saw massive returns, it is now floundering at the bottom of the pool of underperformers, as the financial crisis exposes the fragility of its economy.
It stands on the brink of recession, with the Ministry of the Economy predicting that growth will shrink by 2.2 per cent this year. An 8 per cent budget deficit looms. The rouble has fallen 34 per cent against the dollar, and the government spent a third of its massive foreign currency reserves to manage that decline. And Russia is sitting on £23bn of sovereign debt, prompting both Standard & Poor’s and Fitch, the rating agencies, to cut their ratings to the second-lowest investment grade.
